It is reported that the central government may reduce the petrol by at least 10 rupees per liter. The move is in view of the drop in crude oil prices in the international market and low retail inflation in the country in recent months. In the month of May 2022, the central government has reduced the excise duty by Rs 6 on petrol and Rs 8 on diesel. In any case, it is reported that the decision to reduce vehicle fuel rates again may be made soon.
Crude oil fell 3%
The crude oil market is also excited as more shipping companies have announced that they are ready to operate the Red Sea shipping route through the Suez Canal. Crude oil, the most traded derivative contracts, recorded a three percent decline. With the reopening of the sea route through the Suez Canal, concerns about crude oil/product supply have led to a fall in prices.
Brent crude futures for March expiration fell 3 percent to close at $77.15 a barrel in international trade on Thursday. Similarly, US WTI crude oil futures closed down 3.2 percent at $71.77 a barrel.
Denmark’s Maersk, one of the world’s largest shipping companies, has announced that almost all container ships currently traveling from Asia to Europe will pass through the Suez Canal. Myersk stated that only a few ships have been diverted via the shipping route around the African continent. Similarly, France’s CMA CGM Company has also intensified container movement through the Suez Canal.
This month, Yemen’s Houthi militia attacked some ships crossing the Red Sea route. Following this, the Suez Canal was avoided and the sea route around the African continent was chosen. The drop in crude oil prices is due to the return of shipping companies to the Suez Canal, which will speed up the delivery of products including crude oil. Also, domestic crude oil production in the United States rose to record levels, which depressed crude oil prices in international markets.